Post
Topic
Board Development & Technical Discussion
Re: Ordinals and other non-monetary "use cases" as miner reward on 2140+
by
MeGold666
on 03/07/2024, 08:43:47 UTC

Why is Lightning then not much more popular now, and L-BTC and Rootstock stay in niches? My interpretation is easy: the current on-chain cost is still low enough for people not being forced to use these layer2's. People don't do micropayments on Bitcoin (mainchain) since long ago anyway.
This is one of the big issues with LN - it's not user friendly.

If you think that big blocks and a high tail emission (for example, if we continue with 3.125 BTC per block forever) are the solution, then how do you ensure that the following negative consequences don't occur:

1) full node centralization? (see BSV, Solana ...) (and again, this is NOT because of storage but because of relay/validation costs ...)
2) negligible transaction fees income, making miners totally dependant on the tail emissions?
3) exodus of investors attracted by Bitcoin's deflationary nature?

Problem 3 would lead probably to a hefty dump in price. And problem 1 is crucial in my opinion. If we sacrifice censorship resistance then we don't really need Bitcoin anymore. With a highly centralized network, not only censorship becomes easier but also 99.9999% of the users are forced to use SPV clients, and SPV clients can in some cases be attacked.

1 - You're worried about node centralization and in the same time pushing people to LN which in nature becomes more centralized with time.
I don't know anything about BSV and Solana so can't compare and talk about it but full nodes on Bitcoin that are running on old hardware and with bad Internet connection are not doing any good to the network aside from nice looking statistics.
For example Monero has good number of decentralized nodes, not as many as Bitcoin but that's not due to too high requirement (I run full node on my 10 year old laptop no prob.) but rather just being less popular than Bitcoin.

2 - You would need to read about fee algorithm in Monero to understand how tail-emission is beneficial for Miners.
But in short, miners are always incentivized while people pay low fees, it's a win win for everyone if you're willing to accept inflation that's going to zero but never reaches zero.
The more coins there are, the less inflation there is but due to people losing coins it's practically flat inflation.
There is also wrong assumption that just because there is no limit on the cap, there can be infinite coins and this is wrong.
You know exactly how many coins there will be in existence at any given time in future because of the static emission (0.6 XMR per 2 min block time)

3 - In short term it would hurt but long term Bitcoin would be used more (due to lower fees) and gain more natural price growth which would be much more stable.
Demand for Digital Cash is much higher than Digital Property for investing, Bitcoin would have much higher growth pontential.

As for sacrificing censorship, we are doing it right now by pushing people into second layer solutions and by creating this rough environment for miners in which only few big companies will survive.